Capitalism, Liberalism and Democracy

The current economic crisis is highlighting the tensions between capitalism, liberalism and democracy. In the Eurozone, unaccountable financial actors and institutions are imposing harsh austerity measures on member states that are seriously undermining the legitimacy of democratically elected governments. We are told that we must sacrifice the present in order to save the future. The economic truths of neoliberal theory assure us of this. The recently proposed ‘financial solidarity tax’, also known as the great Cypriot bank robbery, is just an extreme example of the subordination of democratic politics to the dictates of market forces.
This tension, however, is not new. Rather, it is rooted in a longstanding tension between the class organization of capitalism, on the one hand, and the radical levelling potential of democracy on the other. Liberalism, insofar as it proclaims the universal liberty and formal equality of humankind on the one hand, and defends the institution of private property on the other, tends to get caught in the middle of this tension. In a certain sense, the history of liberalism is the history of liberals having to choose a side in this protracted struggle.
The Levelling Threat of Democracy
Prior to the eighteenth century, democracy, as the rule of the demos, was considered by most political theorists to be a revolutionary, and therefore, undesirable, phenomenon.  Aristotle, himself no fan of democracy, described it not as the rule of the majority, but rather, as a form of government in which the ‘indigent, and not the men of property, are the rulers.’ It just so happens that the poor tend to outnumber the rich. Democracy in this sense was not distinct because it entailed the direct participation of citizens in the process of ‘ruling and being ruled’; after all, that was also characteristic of aristocracy, defined as the rule of the ‘best men’. Democracy was distinctive because it was a form of self-government by the lower classes. Democratic freedom, according to Aristotle, was not merely a form of ‘collective sovereignty’ manifesting itself in the independence of the polis; it was also a form of freedom that enabled a man ‘to live as he likes; for … to live not as one likes is the life of a man that is a slave.’ What spooked the aristocrats of Athenian society, as well as their philosophical supporters like Plato and Aristotle, was that democracy undermined the traditional power and authority of the aristocracy. Contemporary critics of the Athenian democracy that depict it as a form of illiberal collectivism that is based on the exclusion of women and slaves tend to overlook this element of the democracy.
It is this conception of democracy that informed most of the history of political thought. And it is for precisely this reason that most of the history of political thought is profoundly anti-democratic. In a brilliant book called Athens on Trial: The Anti-Democratic Tradition in Western Thought, Jennifer Tolbert Roberts demonstrates how most political theorists – liberals included – went out of their way to denigrate Athenian democracy and portray it as, at best, an unfeasible political model specific to small, undifferentiated societies, and at worst, an undesirable form of tyrannical mob rule.
Surely, liberalism lends itself to democracy. This has of course been the standard narrative of much Post-War liberal scholarship. In the 1982 preface to Capitalism and Freedom, Milton Friedman presents as an obvious historical truth the notion that there exists an ‘inescapable connection between capitalism and democracy’. The reality, however, is not nearly so simple. Even if we take universal enfranchisement as the most vulgar measure of ‘democracy’ we are left with an inconclusive record. In the United Kingdom, where capitalism first emerged in the countryside in the seventeenth century before resulting in the industrial revolution of the late eighteenth century, adult men of property did not gain the right to vote until WWI. But even if the evidence did corroborate Friedman’s bold claim, this obscures the fact that by the late eighteenth century, the idea and the practice of democracy underwent a profound transformation that was intended to make it more compatible with the rule of a new, capitalist ‘ruling’ class. Liberalism, as an evolving doctrine of political thought, was instrumental in this redefinition of democracy.
An important turning point in the history of political thought, and one that perhaps first highlights this tension between liberalism and capitalism on the one hand, and democracy on the other, is a debate that occurred between the leadership of the New Model Army and the Agitators elected by the rank-in-file that occurred in Putney Church in London in the autumn of 1647. The debate, which is centred on the competing proposals for a just ‘constitutional’ settlement, quickly turns to a debate regarding the relationship between private property and democracy. The distribution of the franchise thus becomes linked to the principles of popular sovereignty; in other words, the right to vote becomes the vehicle through which the people, as a multitude of individuals, express their sovereign powers. The question then becomes, who are the people? If parliamentary sovereignty is insufficient to protect the rights and liberties of Englishmen, then the people must be able to delegate and reassume their sovereign powers. This implies the notion of consent to political authority.
The more radical Levellers like Rainsborough and Sexby articulate a radical form of popular sovereignty in which each (adult male) individual is invested with a right to choose his own representatives. Rainsborough famously remarks that even the “meanest he” has a life to live as the greatest, and that the poor are no more obliged to obey a constituted authority to which they have not consented than are the rich:
‘I think that the poorest he that is in England has a life to live as the greatest he; and therefore truly, sir, I think it’s clear, that every man that is to live under a government ought first by his own consent to put himself under that government; and I do think that the poorest man in England is not at all bound in a strict sense to that government that he has not had a voice to put himself under; and I am confident that, when I have heard the reasons against it, that something will be said to answer those reasons, insomuch that I should doubt whether I was an Englishman or no, that should doubt of these things.’
Ireton, “having an eye” to the protection of private property, argues that Rainsborough and his fellow radicals would have to ground their political position in a natural right. But English rights and liberties, argues Ireton, are the product of history, not the product of some abstract natural right. Property as well as the franchise, are rights that have been determined by history. While the institution of private property may be divinely sanctioned, its particular form and distribution are the product of human convention. This being the case, Ireton argues that basing a political position on natural right threatens the continuity and stability of the ancient constitution and, by extension, the rights upon which they are based. More specifically, the Leveller position, according to Ireton, would force them to do away with private property altogether (i.e., “deny all civil right”). If men as men possess certain naturally defined inalienable rights, then what is to stop a man from laying claim to someone else’s goods? Worse yet, what would stop the propertyless from expropriating the landed property of the propertied classes, or doing away with the institution entirely?
Part of the solution to this was to present a notion of ‘tacit consent’, that drives a wedge between the obligation to obey authority (and thereby accept the current distribution of property and political power) and the need to actively express one’s consent to that authority. Ireton would restrict the need for express consent (for example, the right to vote) to ‘men who have a local, a permanent interest in the kingdom, who have such an interest that they may live upon it as free men, and who have such an interest as is fixed upon a place.’ Those who have no ‘fixed’ interest in the kingdom tacitly consent to political authority merely by being present. Lest we be confused as to who fits into this latter category, Ireton clarifies it for us:  ‘If a man be an inhabitant upon a rack rent for a year, for two years, or twenty years, you cannot think that man has any fixed permanent interest; that man, if he pay the rent that his land is worth, and he has no advantage but what he has by his land, that man is as good a man, may have as much interest, in another kingdom.’ It is only property owners, those who own either land or a stake in some kind of permanent trading interest, who are obliged to give their express consent to the present authority. Granting that right to the propertyless on the basis of some natural right ‘may come to destroy property thus: you may have a major party, … vote against all property.’ The debate is significant because the same tension between property and democracy find their way into John Locke’s Two Treatises of Government, considered by many to be the founding text of the classical liberal tradition.
It is indicative, of course, that no one in this dispute, including Locke, refer to themselves as democrats. The term ‘Leveller’ emerged as an epithet, implying that the political position of those arguing for an extension of the franchise to those without property (even if they excluded servants and almstakers) were seeking to ‘level’ political and social hierarchies based on property. Republican writers like Marchamont Nedham accused the Levellers of adhering to conceptions of equality that Aristotle associated with Athenian democracy. The American Revolution resulted in a fundamental transformation of the meaning of democracy that essentially expunged the leveling threat from American ‘democracy’. This was largely done through the development of the notion of ‘representation’. Representation as a political concept can be traced back to sixteenth century England to the works of Sir Thomas Smith. In De Republica Anglorum, Smith presents us with a sociology of the ancient constitution in which all Englishmen, regardless of whether or not they were ‘present’ in Parliament, and whether or not they possessed the ‘right’ to vote for a sitting member, were considered to be ‘virtually present’. The idea, of course, was that the landed class that comprised Parliament were capable of knowing and ‘representing’ the interests of the lower classes (whether the latter knew it or not). Incidentally, this idea of virtual representation was also articulated by Edmund Burke in his Reflections on the Revolution in France. At least Smith and Burke did not have the audacity to characterize such representation as ‘democratic’.

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